UPDATE 1-Israel Discount Bank chairman to step down

* Chairman Shlomo Zohar to resign on Jan. 1, 2010

* Zohar to provide consulting services to Bronfman

TEL AVIV, Nov 11 (Reuters) - Israel Discount Bank (DSCT.TA) Chairman Shlomo Zohar will resign on Jan. 1, 2010, the country's third-largest bank said on Wednesday, following a request from the company's controlling shareholder.

The Bronfman-Schron group, which owns 26 percent of Discount, asked Zohar earlier this month to step down by the end of 2009 without giving any explanation.

"We received a letter from the chairman, Shlomo Zohar, which said that due to the circumstances that have arisen, he is informing us that he will cease to be ... chairman of the board," Discount said.

Zohar will provide financial consulting services to one of the companies in the Bronfman group, Discount said. It did not provide further details.

Zohar was scheduled to serve until February 2011. He was appointed in February 2006 after the group bought a controlling stake in the bank from the government.

The Bronfman-Schron group is run by U.S. businessmen Matthew Bronfman and Rubin Schron. Bronfman was in Israel on Tuesday and met Israel's banking regulator and the Finance Ministry's accountant general.